Friday, 26 July 2013

Heaven help me, but I'm going to try to explain the deal
done by Ireland’s Finance Minister Michael Noonan last February when he
transposed the contentious Promissory Notes to Sovereign bonds.

THE ORIGIN

In 2010 Anglo Irish Bank and Irish Nationwide weren't just
in serious trouble, they were bust, dead in the water. Between them they had
liabilities of €30.6bn (Anglo with over €25bn of that), didn't have the assets
to cover those liabilities, leaving their various investors seriously exposed
to a major hit.

At this stage both the European Commission and the ECB were
involved, were fully informed of the crisis.

The ECB controls the printing of euro in the various
Eurozone countries. No country can just willy-nilly print additional currency;
before an individual bank can get a cent, never mind billions, it must produce
evidence of solid assets to back up its request. When they went to the Central
Bank of Ireland in 2010 neither Anglo nor Irish Nationwide had any such solid
evidence; in fact they were zombie banks, insolvent in practice (they could -
still can - actually legally hide this, too complex to explain here!) and under
its own rules and regulations the ECB should have refused permission for the
Irish Central Bank to print that money.

Fearing for the euro, fearing for the survival of bigger
banks in the so-called core countries which at the time were hugely exposed to
banks in the so-called peripherary, the ECB accepted as collateral the infamous
Promissory Notes, signed by Ireland's then Minister for Finance, Brian Lenihan.
It should not have done so but because there were no structures
in place for bailing out a bank (there are now), they accepted those notes. And
so it began.

The ECB allowed the Irish Central Bank print those extra
€30.6bn, which went to Anglo and Irish Nationwide, bailed out their
investors.

The ECB then called in those notes, however, insisted that
year by year over the next decade and more the Irish government - the Irish
people - would have to take that €30.6bn back out of circulation; we would have
to borrow those billions, real money which then became real debt on which we
would be paying real interest, and destroy those billions, until the entire
€30.6bn had been taken out of circulation.

By January of 2013 most people in Ireland were beginning to
grasp the obscenity of this neat little arrangement. Though not a single cent
went to the Irish exchequer, not a single hospital bed paid for, not a single
classroom, every March 31st from 2011 to 2023 our government would
borrow €3.06bn, it would end up with the Central Bank of Ireland, who would
destroy it. All to bail out two zombie banks.

From 2024 to 2031 a reducing amount would be borrowed, would
still be burned, until the entire original €30.6bn Promissory Notes plus
interest, was paid. All told it came to €47.58bn but the interest went largely
to ourselves (table 1 & note 1 below).

AWARENESS DAWNS

As the reality of this absurdity dawned on people there was
outrage, rightly so – this was from the Laurel & Hardy School of Economics,
surely?

Pressure mounted on the government to simply tear up the
remaining €25bn Promissory Notes and face down the Troika, the ECB in
particular. But no, Government didn’t have the stomach for that particular
fight. Instead they came up with a new arrangement, a ‘deal’ which transforms
that very debatable debt (‘Totally illegal’, Finance Minister Michael Noonan
admitted on national radio) into sovereign bonds.

THE NEW PROMISSORY
NOTE BONDS

Here is what happens now: as a result of Noonan's 'deal' the
National Treasury Management Agency (NTMA) issued bonds to the value of €25bn
(currently held by Central Bank of Ireland); that money was used to 'buy' the
remaining Promissory Notes, which were then destroyed.

In other words, one €25bn debt was simply exchanged
for another. The actual Promossory Notes - the paper - was destroyed, the
actual debt debt remained, in full.

So what happens with the debt? A new schedule, that's all, a
new schedule of borrowing, burning and payment, the burden shifted from this
generation to the next, and the generation after that.

Before the end of 2014 the Central Bankwill sell the first
of the new P Note bonds, the smallest of the bonds at that, a mere
€500,000,000. Immediately it's sold we start paying interest to the new
bondholder; in 2038, that bondholder comes a-calling - 'thanks for the
interest for the last 24 years, now I'd like my original €500,000,000 back.'

Before the end of 2015, another €500m will be sold, then
another and another and another, 2016/17/18, interest being paid immediately
they are purchased, the principal to be paid sometime into the 2040s.

It gets worse. In 2019, the first of five annual
€1,000,000,000 bonds will be sold, the billions then burned; in 2024 it
increases again, eight years now at €2,000,000,000 per year, every cent
borrowed and burned.

Finally, in 2032 the last of the P Note bonds is sold, this
one for €1,500,000,000, making a not-so-grand total of €25bn, exactly the same as the remaining Promissory Notes (table
2).

DANTE’S INFERNO,
NOONAN’S HELL-FIRE

As explained above, exactly the same thing happens to all
those billions as was happening before the Noonan 'deal', only at a different
pace. Up to March of last year the government was borrowing €3.06bn per year,
now the pace has eased as has the pressure on them. But that is all they've
done, eased the pressure on themselves and their annual budget. The overall
result remains the same; to bail out the failed investors in two bust banks, a
broke nation is borrowing billions to burn, all at the behest of the ECB, all
also because our own government didn't have the spine to stand up for its own
people.

WHAT, ANOTHER
SCHEDULE?

Meanwhile, however, on all those borrowed and burned
billions we’re paying interest (over €40bn in total) but in 2038, a new
schedule kicks in - the bondholders coming a-calling, looking for their
original money back. Yes, that money, the billions we destroyed.

REFLECT

Just pause for a second and take that in. Expecting to make
huge profits, institutional financiers loaned billions to cowboy Irish bankers
in Anglo and in Irish Nationwide. Those investments failed, now we – the Irish
people – are landed with this bill, plus interest, a projected total of €72bn
(all going well!). Rather than fight this odious debt our Finance Minister
converts the questionable Promissory Notes to sovereign bonds, shifting most of
the responsibility for paying that private debt on to future generations.

Would you do this to your own kids? To settle disputed debt
you were being strong-armed to pay, would you take out a huge loan for your
kids and their kids to pay? That’s what Minister Noonan has now done in your
name.

INTER-GENERATIONAL
DEBT

Inter-generational national debt is normal but there’s
nothing ‘normal’ about this. The Promissory Note billions were for the
exclusive benefit of banks, bankers and high financiers; the sovereign bonds
that now replace them are exactly the same.

WHAT THEY DON’T WANT
YOU TO KNOW

Every government spokesperson on this talks about savings -
how do you effect ‘savings’ in paying a debt you never owed? What they’re
diverting you from is this – with the Promissory Notes, we were borrowing to
burn; with these Sovereign Bonds we are still
borrowing to burn, exactly the same amount.

CHOOSE WHO TO BELIEVE

As with so much that he has done since becoming Minister for
Finance, Noonan’s new ‘deal’ has been generally acclaimed in our national
media. Since this government came to power, however, one little boy, then
another and another has been saying – the Emperor has no clothes.

On this deal we’re saying ‘Yes, the Emperor has new clothes
– same as the old clothes’. It’s a sham, it’s a scam.

Choose who to believe; choose what you do next.

Ballyhea Says No, Charleville Says No; a growing number of
towns and villages around the country have joined us in the Ireland Says No
campaign. There is still time for you to join us, but that time is running out.
Those bonds are scheduled to begin issuing before the end of 2014; no matter
what, that must NOT happen.

The
meeting got off to a dodgy start, yours truly blundering right into a gaffe of
my own unthinking creation, expressing my disappointment that we weren’t meeting
more senior officials (Diego Rodriguez, ECB Troika mission chief, had suffered
a family bereavement in Spain and wasn’t able to make it back to Dublin in
time); the two officials who had actually taken the trouble to meet us took it
well but I spent an uncomfortable few moments trying to extricate myself from
that one. Turns out anyway they were a lot more senior than we knew.

First
off, it should be said that in the near 90 minutes we were with them we did
most of the talking, they did most of the listening; that's not a ‘wishful
thinking’ statement, it’s fact – they did listen, were both very much tuned in
to what we had to say, took copious notes as we went along.

TO START - TWO GREAT LIES
DEBUNKED

We
began by outlining who we were and where we were coming from. Before we even
got to our proposals, however, we said we felt there were two great lies we had
to address, two great lies being told across Europe and around the world about
Ireland and the Irish people.

THE FIRST GREAT LIE

WE ALL PARTIED, THUS BROUGHT
THIS ON OURSELVES.

During
the bubble inflationary years (I hated the Celtic Tiger term even then) Ireland
was awash with money and yes, too many Irish people did party, did piss and
puke their way outside the pubs and clubs of Ireland right through that period.

Too
many people went away and bought the big four-wheel-drive fuel-guzzling
monsters, that's true too.

Many
of us headed for sunnier climes a few times a year, many bought the holiday
home in France/Spain/Portugal, many invested in second and even third houses
here at home, the retirement nest-egg.

Many first-time buyers took out
mortgages they can’t now afford on homes that were massively over-priced.

We
overpaid ourselves also, many of us, in both the public and in the private
sector.

But
did we all 'party'? No, we did not. Did we all engage in all or even any of the
above? No, we did not. Did everyone in Ireland profit during those years? No,
absolutely not.

A question though - are we Irish not entitled to drive big cars, not entitled to a holiday home, not entitled to a standard of living enjoyed by many of those who would criticise us? No? That old Irish guilty/inferiority complex is being exploited yet again.

Because
here's the thing; even accounting for those who did
engage in all or some of the above, did that cause the world-wide banking
crisis in which we found ourselves caught up? No, it did not. Did it cause the
euro currency crisis in Europe? No, it did not.

We
elect people who select people to do certain jobs; if those people don’t do
their jobs properly (and patently the Irish Regulator did not), what can the
people do about it? What do the people even know about it? If those we elect
make false promises, what are we supposed to do when they turn around and
renege on those promises?

NOTHING
the mass of the people did or didn't do in Ireland during those cursed years
caused this crisis. It was the money, the cheap billions flowing in to the
cowboy banks after the launch of the euro, that money then swamping this
economy. That was the source of Ireland's problem.

THE FEW ROTTEN APPLES

Between
the bankers and their developer and political friends, probably not much more
than 100 people at the very top were the link-men between Ireland and the
foreign banks and financial institutions from which came those billions. From
the recently released Anglo tapes we get a flavour of what those guys were like
- cowboys, gamblers, wide-boys on one hand, incompetents on the other.

Even
after a cursory listen, are those the kind of people who should have been entrusted
with the savings of hard-working Germans/French/Dutch etc? But they WERE
entrusted with those savings, and here is probably the most relevant question
of all - by whom? By those to whom those depositors had entrusted their money,
the banks and financial institutions of Germany/France/Netherlands etc.

TO SOLVE A PROBLEM, GO TO THE
SOURCE

They
were the ones who poured those tens and hundreds of billions into Ireland - why
is the finger never pointed at them? Where was their duty of care to their own
depositors? Where was their due diligence? What about the party they were
having in the early years as the profits flowed back from Ireland?

No
sir, the notion that we all partied, that we brought this on ourselves and thus
now must pay the price - nonsense.

And
speaking of Germany and the idea that this is costing them billions: no country
profited like Germany in the first decade of the euro; no country has profited
like Germany since the crisis broke. €80bn
the national government has saved in its bond dealings; add in what the
regional governments have likewise saved, add in also the profits now being
generated in German banks and financial institutions as deposits have migrated
to there from the affected European countries, throw in the billions their
bondholders have shared from the €69.7bn given by the Irish people, plus their chunk
of the €60bn likewise given and now likewise being paid for with interest
by the people of Greece – against all that additional income, how much has
Germany actually given (as opposed to
loaned) to Ireland?

THE SECOND GREAT LIE

AUSTERITY IS WORKING, IRELAND
IS A SUCCESS

We
can see how this impression is being created, the headline numbers being quoted
to back up that assertion. But look behind those numbers.

UNEMPLOYMENT FALLING

The
world is told that Ireland's unemployment numbers are finally falling, dropped
below 14%, corner turned and green shoots.

The
truth is that when all the various government schemes are taken into account,
when all those who are on welfare but in part-time employment are taken into
account, the number soars to over
25%.

EMIGRATION

Never
spoken of when the above headline figure is being quoted but were it NOT for
emigration, where would Ireland be? People are leaving Ireland at levels not
seen since the 1840s, the Great Hunger, when the population almost halved in
only a few years. It’s not just young people leaving either, though they are
and in droves, a small
club in Mayo recently picking a notional starting 15 who have all
emigrated. It’s entire families, it’s people in their 50s and even in their
60s, forced out by the circumstances created by these austerity programmes.

SUICIDE

Yet
another statistic overlooked when Europe, having been so misinformed by our own
officials, talk up how Ireland is doing under the austerity programme. There
are so many casualties at the moment but these are the ultimate, a growing
number of people who feel trapped, can’t see any other way out and thus act,
not because they wish for death but because they can't handle life anymore, not
this life anyway.

RETAIL SALES

You
want to know how a country is doing, look at the retail sales, look to commercial
vehicle sales and see how much confidence business has in the immediate
future; in Ireland’s case, little or none. They’re the ones doing the highest
and the heaviest mileage, they’re the ones who need to keep their fleets up to
date; they’re the ones now hedging their bets.

DIY STORES IN TROUBLE

This
week another DIY chain, Homecare, went into Receivership, joining Atlantic
Homecare and B&Q; not alone has the construction industry folded, people
can’t even afford to maintain what they have.

EXPORT-LED RECOVERY

Another
myth. Aside from the fact that as pointed
out by the EU itself, many of those exports aren’t actually fully produced
here at all, there is a growing
trend away from Goods exports to Services
exports, the latter far less beneficial to the Irish economy – high-end jobs,
many of them filled from outside the country anyway but certainly having very
little impact on the local unemployment figures.

DEBT SUSTAINABILITY

The
normal formula used when calculating national debt sustainability is GGD/GDP,
Gross Government Debt as a percentage of Gross Domestic Product. Given what’s
already been pointed out vis-à-vis the skewing of GDP in Ireland by the
multinationals, however, the more pertinent formula for us would be GGD/GNP,
Gross Government Debt as a percentage of Gross National Product.

According
to this Sunday
Business Post article, at the end of 2012 Ireland’s national debt stood at
just under €192 billion, equivalent to 118 per cent of gross domestic product
(GDP). Apply the debt figure to GNP, however, and we get a truer picture for
Ireland – 192/133.4 x 100 = 144%.

Worse,
that’s not even the true national debt figure. With its own remaining bonds of
around €25bn, with IBRC and its exposure now in its lap, though NAMA is
nominally privately owned (51% in ‘private’ hands) in reality it’s our baby,
fathered and mothered, bred and buttered by us. Add in those bonds to the
figure above, where does that leave
us?

Sustainable?
Given that we’re in recession, unlikely to see any real growth for years, that
debt figure increasing in bounds? Economist Michael Taft puts it very succinctly
– a
bloody disaster. Constantin Gurdgiev, an economist from the another side of
the field, puts it as colourfully – the light at the end of the tunnel is an
oncoming train.

INTRO SUMMARY

The
ECB representatives gave us all the time we needed to outline the above,
without interruption. It took up a sizable chunk of time, time that was very
precious – when we began this campaign we hadn’t expected to have to actually
present Ireland’s case for debt writeoff ourselves and here we were spending
all these precious minutes in a preamble, having to debunk lies about Ireland,
lies being spread by our own government. In the circumstances, however, we felt
it was necessary.

THE BALLYHEA PROPOSALS

Having
finished the opening statements, we then got to present our proposals
for bank-debt write-off for Ireland. There are three items in those proposals
but only the first pertains to the ECB, the destruction of the €28.06bn in
Promissory Note Bonds currently held by the Central Bank of Ireland.

Those
bonds are what’s left of the €30.6bn bailout of two banks in 2010 (Anglo Irish
Bank €25.3bn, Irish Nationwide Building Society €5.3bn), at a time when they
were known to be already insolvent. The Irish government of the time issued the
notes, the ECB gave the okay; the legality of those Promissory Notes is now
being tested in the High Court but the even bigger question is their legitimacy,
at any moral or ethical level.

Just
as with the original Promissory Notes themselves, this is €28.06bn being
borrowed to ‘burn’; that’s worth repeating, it’s billions being borrowed only
to be destroyed, and by an already massively-indebted economy, every cent of
which was for the benefit of zombie banks to pay failed investors, not a cent of
which went to the people who are now expected to pay interest on all those
destroyed billions and whose kids and grandkids will then have to pay the
original €28.06bn. Obscenity piled on obscenity.

We
want the ECB to allow the total destruction of these bonds. It was done, it can and must be undone. How? How can this be
done within the ECB's own parameters? We don’t have the answer to that; we weren’t consulted when this debt was being imposed on us in the first place - don’t ask us how it can now be
lifted.

DISCUSSION STAGE

Up
to now the meeting had been almost completely one-sided; at this stage an
exchange of views began.

As
is included in the proposals, we stated our position that we believed this
crisis goes back to the launch of the euro.

It
was a flawed design, stated as such as far back as 1998 in a Financial
Times article by renowned Belgian economist Paul de Grauwe, who then
created a fictitious scenario that subsequently turned out to be not so
fictitious at all. There were major structural flaws in the design, all of
which was known even within the EU itself at the time, and still it was
launched. That was a grievous error.

However,
because we were part of the Eurozone, signed up to all this, we share the blame
and thus must share the cost. Sharing is the key word here though;
as yet no-one seems to have taken any blame for the flawed design – so be it.
But Ireland has been hit disproportionately, massively disproportionately, with
the cost.

How
massively? Our gross bailout cost (not including either the assets we now hold
– a few billion – or the interest paid on the loans, the coupons on all the
bonds, the interest lost on the €20bn taken from the National Pension Reserve
Fund) is €69.7bn.
From the 2011 Census, that amounts to over €15,000 per capita in Ireland. The
equivalent for Germany? Over €1.1tn, that’s over €1,100,000,000,000. Would Germany
tolerate that? Never. Yet we’re expected not just to accept that burden but
even to be grateful to our European partners for their assistance.

ARGUMENTS, COUNTER-ARGUMENTS

As
with Mr Honahan in our meeting of the previous day (report here),
Ireland’s legal obligations were put to us, the fact the ECB is duty-bound to
implement the various Treaty rules; as with Mr Honahan, we asked where the
legal protection for the people stood in all this.

The
ECB reps spoke of Ireland’s unilateral action in 2008, the infamous Blanket
Bank Guarantee, spoke of other Irish government actions taken on their own;
they explained also that the ECB didn’t get involved officially until 2010 by
which time much of the damage was done.

We
countered with the argument that in circumstances where there were no
European-wide structures, no guidelines even, Ireland’s leadership were acting
as best they saw fit to protect Ireland’s interests. Misguided actions as it
turns out, deliberately misguided as shown in the Anglo tapes but irrelevant; the
real fault lay with us as Europeans, all of us, and with that seriously flawed
currency launch, the lack of foresight, oversight and structure.

Insurmountable
legal barriers, that’s what we’re told we face, and it was pointed out to us that
if Ireland unilaterally decided to destroy the Promissory Notes bonds now held
by the Central Bank of Ireland, there would be serious repercussions.

Daniel
O’Connell (Catholic Emancipation), Abraham Lincoln (slavery), Nelson Mandela
(apartheid) all faced ‘insurmountable legal barriers’, ‘serious repercussions’;
we know what happened. Our government has balked at these challenges; Ballyhea,
Charleville, Ratoath, Tralee etc – no-one in this campaign will be thus
stopped. Debt slavery for us and for several future generations? This is odious
debt, we will rid ourselves of it.

ON OUR OWN

We
have done a lot of research on all of this, we link to many experts in the
above counter-arguments to the lies being told about us, and as we explained to
the ECB officials when we sat down with them, in terms of economics/high
finance/politics we know we’ve wandered miles out of our depth here. Ultimately
however we rely on no-one but ourselves in all of this.

We
began this campaign on a single, simple, very fundamental premise – what’s been
done to the Irish people, what’s still
being done to the Irish people, is wrong. This was private debt, private
commercial deals with all that implies (risk/reward, profit-and-loss), between
private commercial institutions, no involvement whatsoever of the Irish people,
yet we now find ourselves landed with the entire cost, plus interest.

Our
own official institutions – banking, regulation, government – have all already
let us down, under the previous administration and under this. We are forced
now to go directly to Europe ourselves to ask for justice for Ireland.

FINAL APPEAL

Time
and again Fiona appealed to them to look at this at the human level, explained
that despite what they were being told, there was no feeling of recovery on the
ground – quite the opposite, there is growing anger, growing despair.

We
asked them to factor in to their various calculations the impact their policies
are having on people, on their fellow citizens. We can quote all the various
indices mentioned above but where is the index of human misery, of human
stress?

All
kinds of laws are being thrown at us in relation to why this bank-debt must be
paid by the people; what of the higher laws enshrined in all our constitutions
including that of the EU, what of human rights? What of the right to education,
to health services, to a job, to a home, to water and electricity? Bit by bit
these rights are being squeezed, sacrificed on the altar of high finance.

Trade
apart, the original idea behind the establishment of the European Coal &
Steel Community (1951) and the European Economic Community (1958) was to create
a Europe of reduced nationalism, of enhanced understanding and appreciation of
each other. The new EU/EC/ECB and its policies is having the opposite effect
now, polarising people again, entire nations demonised (the feckless Irish, the
reckless Greeks, the ungovernable Italians etc etc).

A change of direction is
needed, new thinking is needed, new policies are needed, people-first policies,
an end to the diktats of the money markets.

SUMMARY

All
of this we presented to the ECB officials. We don’t know if we made any
impression; if we did, we don’t know how much of an impression, or if it was
positive or negative. We did, however, leave the meeting with more hope than
when we entered. Why? Because they had heard us out.

The
meeting was also constructive in that previously, the ECB was this disembodied organisation
somewhere out there; now we’ve come face-to-face with them, and they’ve come
face-to-face with us. Hopefully we’re both the better for it.

They
made no commitments, nor did we expect any. This is a process, that’s all. We
thought when we started that the media would quickly be on board with us as
they saw the massive injustice being perpetrated, that they would help alert
the people who would take to the streets en-masse and we’d have all this done
and dusted in short order, our government pressured into taking a stand. Now we
know better.

We
are forced to fight our own government, though we would prefer to have them
with us; with only a few prominent allies (they know who they are) we are
forced to fight our own national media, who ignore those of us who are trying
to tell the truth but instead consistently repeat the government lines; ultimately,
we have been forced to go to Europe directly ourselves.

This
is now a long war but we’re in it for the long haul. It is taking a lot of
personal sacrifice by so many of us but we’re heartened by the support
gathering around the country, the heroic little groups like our own that are
now marching in so many different locations.

JOIN THE CAMPAIGN – LOOKING FOR
VOLUNTEERS

We
want more to join us. It’s not too late – it’s never too late to do the right
thing. Our march takes place every Sunday, same time, 11.30am; our aim has
never changed, the lifting of this bank-debt burden.

We
don’t know what happens next. We asked to meet the ECB again, will go to their
HQ in Frankfurt (again!)
if needs be. But at least now, and for the first time (which Michael Noonan had
already told us but which the ECB officials confirmed), someone from Ireland
has asked for bank-debt write-off.

Apologies
for the length of this report but you know, with €31bn at stake with the ECB,
there’s a lot involved!

The ‘Ballyhea Says No to Bank-debt’ and ‘Charleville Says No to Bank-debt’ groups have been marching every week since March 6th 2011, two years four months and counting, in protest against the imposition of what we believe is illegal and truly odious private bank-debt on the people of Ireland.
Our case is simple, our cause clear.

The case: We believe the property bubble in Ireland and the subsequent bank crisis was caused by the launch of a seriously flawed new currency, the euro, with no proper foresight of the damage it would cause, no proper oversight of that damage as it was happening, no structures then in place to deal with the fallout when the financial tsunami first hit in Europe, Ireland the first casualty.

The cause: Because this is a Eurozone problem there is a shared collective responsibility for the damage caused but there should also be a shared collective burden to repair that damage. Currently that burden has been disproportionately loaded on the Irish people; we want that burden lifted and distributed evenly across the Eurozone. Further, we want those whose reckless, exploitative and in some cases criminal actions following the launch of the euro, the top bankers and financial institutional gamblers, to also shoulder their share of that burden.

BACKGROUND TO THE MEETING

The Central Bank of Ireland (CBI) currently holds the Promissory Note bonds, the sovereign bonds created jointly by Finance Minister Michael Noonan and Mr Honahan to cover the remaining Promissory Notes remaining as of February this year, 2013; that amounts to a total of €25bn.
Those bonds have already been issued by our National Treasury Management Agency (NTMA), were then taken over by the CBI who are now paying interest on them to the EU of just under 1% per annum - that’s how these things are done.

Minister Noonan and Mr Honahan have drawn up a schedule for these bonds to be sold on to private investors (that schedule awaiting the approval of the ECB, by the way). Under the proposed schedule the first tranche of those bonds, for a mere €0.5bn (not so mere when it stands up to its full height, €500,000,000), must be sold on before the end of 2014.

When that is done, four things happen:

The entire €500,000,000 thus generated is destroyed by the CBI;

We start paying interest (the coupon) of nearly 3% on that €0.5bn;

We stop paying the EU interest of 1% on that €0.5bn;

In about 25 years (the ‘term’ of the bond), having got all their interest in the meantime, the bondholder(s) will be at the door of the CBI/NTMA looking for their entire €500,000,000 back.

This routine is repeated annually, the bond amounts increasing (there will be eight years at €2bn/yr), until the entire €25bn of P Note bonds has been taken in; it will be destroyed, the entire €25bn, interest at 3% will be paid annually to private investors (it will then be at €1bn/yr), the final tab for that €25bn will be picked up by our kids and grandkids.

PURPOSE OF THE MEETING

Our purpose was to convince Mr Honahan that because those new bonds are a) in lieu of Promissory Notes that were written to cover failed bonds in failed banks (Anglo Irish Bank €25.3bn and Irish Nationwide Building Society €5.3bn), and b) because those bonds were written to cover funds that were drawn from the Emergency Liquidity Assistance fund (‘liquidity’ assistance the key word here, when those banks were known to be already insolvent), €30.6bn in total but not a cent of which went to the Irish people, not alone should CBI not sell on those bonds, they should destroy them now, pay no interest to anyone for them.

‘MEAT’ OF THE MEETING

We began by asking about a previous sovereign bond issued in lieu of the 2012 Promissory Note payment of €3.06bn; Mr Honahan confirmed to us that this bond is in fact still intact and still held by the CBI, has not yet been sold on.

We then asked about the first tranche of the €25bn, whether all or part of the first €500m had been sold on; again Mr Honahan confirmed to us that no, this bond too was still intact.

This means that the CBI now holds all but the first payment (made by the current government, without fanfare of any sort, on March 31st 2011) of the original entire Promissory Notes total; that current total comes to €28.06; this is the sum we are now fighting for.

From the outset though it was clear that there would be no meeting of minds. We outlined our case to Mr Honahan, he outlined his case to us, we both met a stone wall.

TOUR-DE-FORCE v TOUR-DE-FARCE

Several times Mr Honahan told us that this deal done by himself and Mr Noonan was an excellent deal, a negotiating tour-de-force by Ireland. In fact, mild-mannered man and all that he seemed to be, he was almost boastful about it.

Several times we rebutted that claim; it was in fact a tour-de-farce – how can you claim any kind of success in negotiations, we argued, where you never asked for debt write-off never mind debt write-down, where you never even brought up the primary argument, that this entire debt is contentious, possibly illegal.

On that, and just by the way, in the morning we met and were hugely impressed by David Hall, the individual who had taken the original High Court case against the Promissory Notes, that case now taken up by one brave TD, Joan Collins, and will be heard by a three-judge High Court panel in October, with the Promissory Notes/bond ‘deal’ now added – fingers crossed.

It occurs to me as I write this that we should at least have looked for an assurance from Mr Honahan that he would hold all those bonds until this case is decided, though I doubt we’d have got that assurance. He wouldn't (understandably) give us an exact schedule of when he planned to sell on the bonds, said he had to gauge the market and pick his time; he did however make clear that it is his full intention to sell on all those bonds, per the schedule.

THE FINAL EFFORT
As is our way, we had a fairly blunt discussion with Mr Honahan. He stated the government had a legal obligation to pay these bonds, we asked 'where were their legal obligations to us when this debt was being imposed on us'; he stated the government couldn't break its promises to the bonds markets, we asked if it was okay then for it to break its promises to their own people. Stalemate.

We made one final appeal to Mr Honahan, asked him if he would do something like this on a personal level, that if he found himself being strong-armed in a contentious and disputed personal debt situation, he would solve that problem by taking out a loan his kids and grandkids would have to pay.

Three times it was put to him, three times he refused to answer, saying he couldn't even envisage such a scenario.
Our belief is that he couldn't envisage the scenario where he would in fact take out those loads for his kids to pay, that he couldn't envisage the scenario where he would do on a personal level what he and Michael Noonan have done to this nation, and thus to this nation’s children.

SUMMARY

We learned that the entire €28.06bn (€25bn + €3.06 2012 Promissory Note bond) is intact in the CBI – this is a positive, means the entire prize is still there.

We learned why Ireland is in the situation it’s in vis-à-vis Europe, that those we trust to negotiate on our behalf take up initial positions light-years away from where we feel they should be, that their every decision is governed by fear, no value put on freedom and independence, no value put on the human misery resulting from their fear-driven decisions.

As we were leaving we asked Mr Honahan what the consequences would be were he to do as we asked and refuse to sell on the bonds and instead, simply destroyed them; he said there would be dire consequences to be suffered from the ECB, that this would be something he couldn't even begin to contemplate – he didn’t agree with ‘posturing’; neither did we, we told him, neither did we. We would make clear to the ECB our bottom line; we would mean it.

CONCLUSION

We have had a number of meetings with a number of people since all this started; rank amateurs we admit, getting into the ring with these top professionals and risking a beating. In every case, however, even with Mr Szekely of the EC, we felt we had made some sort of positive impact, left a few ripples in those very big ponds. We walked out the front door of the CBI building feeling not a ripple behind us, no impression made.

We should I suppose have been feeling down, disheartened; Fiona and myself felt exactly the opposite. We knew now that our decision to start campaigning on our own behalf, on top of the weekly protest, was the right decision; we knew now that what we already strongly suspected was true – no-one on the official Irish side is negotiating hard on behalf of the people; rather, they are fearful and fear-driven. Under this government the austerity policy will continue, debt on odious debt will continue to be piled on the people.

We headed for our evening meeting with the ECB more determined than ever. Into the lion’s den, yes, and I've said this already; we know we’re out of our depth, out of our league and leagues out of our comfort zone but against all their arguments about guarantees and legalities and complex financial engineering we know also one fundamental fact – we’re right.

In imposing this bank-debt burden on us, what has been done to Ireland and its people by our own and by Europe, what is still being done to Ireland by our own and by Europe, is wrong.